Unit 5 The Law and Unit 5 The Law and the Workplacethe Workplace

Chapter 13 Agency and Chapter 13 Agency and EmploymentEmployment

13.2 Types of Authority and 13.2 Types of Authority and AgentsAgents

ObjectivesObjectives►Students will identify the different Students will identify the different

types of agency.types of agency.►Students will explain the difference Students will explain the difference

between actual and apparent authoritybetween actual and apparent authority►Students will distinguish between the Students will distinguish between the

different types of agents.different types of agents.

Academic VocabularyAcademic Vocabulary►Apparent-Adjective, means clear or Apparent-Adjective, means clear or

obvious obvious

► Incidental-Adjective, means Incidental-Adjective, means unpredictable or casualunpredictable or casual

►Extent-Noun, means the degree to Extent-Noun, means the degree to which something goeswhich something goes

Types of Agent AuthorityTypes of Agent Authority Actual Authority-the real power a principle Actual Authority-the real power a principle

gives to an agentgives to an agent►Express Authority-comes from the orders, Express Authority-comes from the orders,

commands, or instructions a principal explicitly commands, or instructions a principal explicitly gives and agentgives and agent

Power of Attorney-any writing granting someone Power of Attorney-any writing granting someone authority to act as an agentauthority to act as an agent►General Power of Attorney-very board authority General Power of Attorney-very board authority ►Limited Power of Attorney-Limited to what is Limited Power of Attorney-Limited to what is

statedstated►Durable Power of Attorney-Make decisions when Durable Power of Attorney-Make decisions when

medically incapacitatedmedically incapacitated

Types of Agent AuthorityTypes of Agent Authority Implied Authority-additional Implied Authority-additional

authority that allows an agent to authority that allows an agent to perform reasonable acts necessary perform reasonable acts necessary to carry out the express authorityto carry out the express authority

Apparent Authority-authority that a Apparent Authority-authority that a third party believes an agent has third party believes an agent has while acting on behalf of the while acting on behalf of the principleprinciple

Types of AgentsTypes of Agents General Agent-agent who has General Agent-agent who has

authority to perform any act within authority to perform any act within the scope of the businessthe scope of the business

Special Agent-agent whose authority Special Agent-agent whose authority is restricted to accomplishing only a is restricted to accomplishing only a specific job or purposespecific job or purpose

Types of AgentsTypes of Agents Agents who relate to other agentsAgents who relate to other agents►Used to classify agents based on Used to classify agents based on their relationship with other agentstheir relationship with other agents Subagents-agent lawfully appointed by Subagents-agent lawfully appointed by

another agentanother agent Agents Agent-agent appointed by an Agents Agent-agent appointed by an

agent without authorityagent without authority Coagents-2 or more agents hired by Coagents-2 or more agents hired by

the principlethe principle

ActivityActivity►List the 3 parties in an agency List the 3 parties in an agency

relationship.relationship.►Describe the difference between a Describe the difference between a

general and a special agent.general and a special agent.► Identify the legal distinction between a Identify the legal distinction between a

subagent and an agent’s agent.subagent and an agent’s agent.►Write a paragraph classifying what type Write a paragraph classifying what type

of authority is involved in the following of authority is involved in the following situation.situation.

ActivityActivity► Paul, a clothing buyer, has purchased textiles Paul, a clothing buyer, has purchased textiles

from Rachel for two years. In the past, Rachel from Rachel for two years. In the past, Rachel has given him a 20 percent discount. This has given him a 20 percent discount. This year, Paul has purchased $100,000 of textiles, year, Paul has purchased $100,000 of textiles, but when he got the bill, he had received only but when he got the bill, he had received only a 10 percent discount. When he called Rachel a 10 percent discount. When he called Rachel to try to raise the discount back to 20 percent, to try to raise the discount back to 20 percent, she said she did not have the authority to do she said she did not have the authority to do that. What type of authority did Rachel have? that. What type of authority did Rachel have? WhyWhy